How money transfer to India works?

Are you an Indian (desi) who recently travelled to USA, UAE, Saudi Arabia, UK, etc for your work assignment? If so then you must be wondering what is remittance, how it works and how can I use to transfer money to India then continue reading.

What is Remittance?

Remittance is a money transfer transaction initiated by a foreign worker to his family/friends back in his home country. In simple terms it is an international money transfer sent by a foreign worker back to his home country for personal use.

Indians travel all over the world for better opportunities and while they are in the foreign countries, all the money they send back to India for personal use is considered as Remittance. For example, a H1B professional working in USA can transfer money to India to support his family members or pay his bills using remittance service.

So the international money transfers between Individuals are called as Remittance and there are dozens of remittance service providers in countries like USA, UK that offer services to transfer money to India.  And most of these remittance service providers does not allow transferring money for business purpose; you can’t use remittance services to fund a business or pay salaries of your employees in home country. More details about business transfers in another blog post.

Remittance service allows a Indian software engineer working in USA to transfer money to India for personal use like pay his bills and supporting family members

How remittance works?

Remitting money to India is a simple process, especially from countries like USA and UK where there is a lot of competition between service providers. A typical remittance process for a first time transfers generally follows these steps

  1. Identify the money transfer service that works best
  2. Sign up online with money transfer service.
  3. Enter receivers information like name, address, Indian bank account details, etc
  4. Enter sender’s foreign bank account details to fund the money transfer request
  5. Enter the amount of money to transfer
  6. Review  information provided and submit the request to initiate money transfer.
  7. Ta-da!! Money should be transferred from your foreign bank account to receivers Indian bank account in few hours or days depending on the money transfer service you used.

Aren’t these steps fairly simple and straightforward? Thanks to the innovations of several startups and fintech companies, transferring money across the globe is as simple as a domestic online bank transactions.

Remittance to India is huge!

Remittance to India has been in growing rapidly since 1990 and it is playing a significant role helping India’s forex reserves. Based on one of the recent estimates, approximately 25 millions (2.5 crores) of Indians live/work outside India and they transferred 68.91 billion US dollars between 2014-2015. Also India is the largest receiver of Remittance money with a lion share of 12% of global remittance transactions.


Remittances earn developing nations three times as much as they are sent in aid

60% Remittance comes from 2 countries

Indian migrants living in West Asia and North America are the biggest source of remittance to India as they account 60% of total remittance. While Indian workers in West Asia sends 30.8% of total foreign remittances, North American counterparts send 29.4% of remittance.

According to this pew report from 2015  UAE, USA and Saudi Arabia are the top 3 sources, while Pakistan and United Kingdom stood at 4th and 7th places. Similar to top 3 sources accounting to majority of remittance to India, 40% of this money flows into Kerala, Tamil Nadu, Punjab and Uttar Pradesh.

Worldwide Remittance Flow

The nice folks at TagesWoche created a great visualization of Remittance history and its mighty raise. Explore this interactive visual for great insights.

coziie remittance

Helping desi community to make better choices by providing remittance information and comparison tools.

You may also like


Follow Us

Follow us on your favourite social network for updates